Annual Report 2023–2024

Office of the Taxpayers’ Ombudsperson

1000-171 Slater Street, Ottawa, Ontario K1P 5H7

Telephone: 613-221-3109 | Toll-free: 1-866-586-3839
Fax: 418-566-0321 | Toll-free fax: 1-866-586-3855

© Minister of Public Services and Procurement Canada 2024

Cat. No.: Rv6E-PDF
ISSN: 2564-1727

Letter to the Minister of National Revenue

October 9, 2024

The Honourable Marie-Claude Bibeau, P.C., M.P.
Minister of National Revenue
7th Floor
555 MacKenzie Avenue
Ottawa ON K1A 0L5

Dear Minister:

Pursuant to Order in Council P.C. 2020-0703, I am pleased to submit to you the 2023–2024 Annual Report entitled “Fair Access to Service,” which covers the activities of the Office of the Taxpayers’ Ombudsperson for the period of April 1, 2023, to March 31, 2024.

Yours sincerely,

Mr. François Boileau 
Taxpayers' Ombudsperson

Message from the Taxpayers' Ombudsperson

I like to compare the CRA to a huge boat, an ocean liner if you will. This ship takes a strong captain, a commander, a first officer, a navigator, a chief of operations, a chief engineer, a chief of security, a chief of tacticians, a chief medical officer, a chief scientist, and several advisors. If you apply this analogy to the CRA, we find a similar situation with the Commissioner, the Deputy Commissioner, the 13 branches, and the four regional offices. That is a lot of people, all across the country. On this ship, it could have an entire deck dedicated to security, appeals, audit, collections, public affairs, human resources, and so on. The decisions made by the CRA must be carefully considered and based on a well-defined course.

As the Office of the Taxpayers’ Ombudsperson, we are not on this ship, but more a zodiac riding alongside, keeping a careful track of the changing weather patterns. As the weather changes, our Office must remain alert and knowledgeable to the needs of the ship passengers. The changing wind can alter the course depending on the needs of the passengers, especially those who are most vulnerable. We receive data from the passengers who have not been satisfied with the services or who are even at risk of falling overboard. Just as the ship does, we receive individual complaints and identify systemic issues affecting all those aboard and need to act on them.

We rely on the CRA for refuelling and supplies, for mechanical breakdowns, and even to support our personnel. Our zodiac is able to crest the waves and maneuver to port or starboard with fluidity and ease. Of course, planning is always required, but we cannot ignore the waves and the wind. And it is our role to mention how we feel about the services offered by the ocean liner and, above all, how we can recommend changes for it to stay the course.

Because the zodiac is close to the water, we are able to see the colour of the coral just below us that will never make waves. These corals are fragile and need our utmost attention. They contain an entire ecosystem where fish, molluscs and crustaceans find food and shelter. They can even serve as an invaluable barrier against natural phenomena such as typhoons and act as breakwaters. We can imagine that these coral represent the hard-to-reach populations, like the vulnerable populations. The ocean liner is not always able to see these corals as well as the zodiac can from the water, and it is its role to always take these coral into consideration in the ocean liner’s movements and activities.

That is why the 2023–2024 Annual Report will be divided into two parts, one outlining the activities of our Office in terms of inputs such as complaints, and a second part focusing on outputs, including the outreach activities and efforts that need to be undertaken by us and by the CRA to support the most vulnerable populations.

Once again, I would like to offer my heartfelt thanks to my team at the Office of the Taxpayers’ Ombudsperson. What they are able to accomplish on a daily basis, with the few resources we have at our disposal, is nothing short of a miracle. That said, we remain transparent when it comes to the backlog of cases. This is not a situation that anyone wants, but one that unfortunately seems inevitable to us. I would also like to thank all of those who have provided us with valuable information for their patience, whether be through complaints or on outreach activities. They are the reasons why we prefer to stay on the zodiac.

What we do

The mandate of the Taxpayers’ Ombudsperson is to assist, advise and inform the Minister of National Revenue about any matter relating to services provided to a taxpayer by the Canada Revenue Agency (CRA)

The Taxpayer Bill of Rights

1. You have the right to receive entitlements and to pay no more and no less than what is required by law.
2. You have the right to service in both official languages.
3. You have the right to privacy and confidentiality.
4. You have the right to a formal review and a subsequent appeal.
5. You have the right to be treated professionally, courteously, and fairly.
6. You have the right to complete, accurate, clear, and timely information.
7. You have the right, unless otherwise provided by law, not to pay income tax amounts in dispute before you have had an impartial review.
8. You have the right to have the law applied consistently.
9. You have the right to lodge a service complaint and to be provided with an explanation of our findings.
10. You have the right to have the costs of compliance taken into account when administering tax legislation.
11. You have the right to expect us to be accountable.
12. You have the right to relief from penalties and interest under tax legislation because of extraordinary circumstances.
13. You have the right to expect us to publish our service standards and report annually.
14. You have the right to expect us to warn you about questionable tax schemes in a timely manner.
15. You have the right to be represented by a person of your choice.
16. You have the right to lodge a service complaint and request a formal review without fear of reprisal.

Our role

Our role is to improve the service the CRA provides to taxpayers. We do this by reviewing individual complaints and by looking into issues that can affect more than one person or a segment of the population.

Although we only have around 30 employees to serve over 40 million Canadians, we strive to provide the best service possible. The size of our team does not stop us from listening to and helping a wide variety of taxpayers from coast to coast to coast.

With the diversity of Canada’s population, this year, like every year, we received a wide variety of complaints. Whether it was a single mother with a newborn struggling to deal with the CRA, a self-employed mechanic having difficulty paying the amount they owed, or a representative trying to settle an estate for a grieving family, we were able to help resolve their situations.

All taxpayers’ issues are different. Depending on the individual situation, we will take different courses of action. For many taxpayers who contacted us, we told them how they could complain to the CRA about its service. Although we are always happy to help taxpayers experiencing service-related issues with the CRA, generally they must try to resolve the situation with the CRA before our Office can get involved.

Six ways we can help

The difference we can make

Many people come to us when they feel there are no other options. Many do not even know they can complain to the CRA by submitting a complaint to CRA Service Feedback. Some are relieved to know there is a Taxpayers’ Ombudsperson who is independent from the CRA, and others need their issue resolved urgently and have been unable to do so with the CRA. We can make a difference by helping taxpayers every step of the way.

Our involvement has led to the CRA processing income tax and benefit returns after long delays, reassessing eligibility for and paying out benefits, reducing the severity of its collection action, and improving communication.

In many cases, our influence has positively changed the course of taxpayers’ lives. As a result, some taxpayers did not have to make the difficult choice between paying rent or putting food on the table.

When an issue is not resolved in the taxpayer’s favour and we see an opportunity for the CRA to improve its service, we will make a recommendation or send a service improvement request to the CRA. Taxpayers work hard to meet their obligations, and the CRA should strive to do the same for taxpayers.

This year we made a difference by:

Our operations

The CRA administers tax laws for the Government of Canada and for most provinces and territories. This keeps it busy implementing new initiatives, maintaining programs, and providing support to Canadians.

The COVID-19 pandemic increased pressures on the CRA, much like it did for many Canadians. This pressure affected the majority of areas within the CRA, but the area that took the longest time to resume full operations was collections.

Between March 2020 and July 2020, the CRA suspended most of its collections operations to minimize the financial impact on taxpayers. Although most collections programs fully resumed by February 2021, not all did. Additionally, the programs that did resume operations started offering more flexible payment arrangements and made more attempts to work with taxpayers before carrying out legal action, such as garnishing the taxpayer’s salary or bank account. As a result, collections issues were not a top complaint driver for our Office for the past few years. That all changed in February 2023.

In October 2022, the CRA began applying income tax refunds towards COVID-19 overpayments. By February 2023, the CRA resumed all of its remaining collections efforts. As a result, the CRA has been applying refunds to pay back overpayments, reducing Canada child benefit (CCB) payments to put towards CCB debts, and applying other credits and rebates to cover any other debt. The CRA’s resumption of collections activities was one of the reasons why we saw an increase in complaints and enquiries this fiscal year compared with the year before the pandemic (April 1, 2019, to March 31, 2020).^{Footnote *}  When compared with the previous fiscal year (April 1, 2022, to March 31, 2023), this fiscal year saw more than double the number of complaints and more than triple the number of enquiries related to a CRA collection issue.

Taxpayers also called our Office with a wide variety of other service-related complaints. The majority of these complaints dealt with:

• CRA contact centres (long wait times, call disconnected, wrong information provided, agent behaviour, etc.)
• delays in receiving notice of assessments and refunds
• issues in receiving the CCB when it is not clear to the CRA who is primarily responsible for the child
• delays in resolving service complaints

Taxpayers come to us with a variety of complaints about CRA collection activities: businesses say that the CRA has put their account on hold, preventing them from operating; families say that the CRA is collecting too much at once; and individuals say that the CRA has frozen their bank accounts without warning.

However, some taxpayers simply disagree with what they owe the CRA, but did not work with the CRA to resolve their disagreement before it started collection action.

The CRA’s collections powers are broad, and these actions can have serious effects on taxpayers. In some cases, they can cause financial hardship for taxpayers, leaving them without money to pay for their basic necessities.

For example, the CRA can:

• garnish wages or other income sources
• put liens on assets and seize them
• offset refunds, benefits and credits

This year we heard from businesses that could not pay employees, families who could not buy food, and individuals who could not pay rent or make mortgage payments as a result of the CRA’s collection actions.

The case of Célestine Juniper demonstrates why it is important that the CRA do all it can to try to resolve any dispute before sending debts to collections. It also shows how dealing with the CRA at an earlier stage and responding to the CRA’s requests could benefit the taxpayer. Although the CRA had a duty to try to recover the benefit that it determined had been overpaid, Célestine Juniper also could have worked with the CRA better.

Taxpayers must be willing to work with the CRA before it tries to collect their debts. The issue could have been resolved much sooner if Célestine had provided the additional information the CRA had requested.

It can be hard for the CRA to resolve a dispute before it tries to collect debt through its collections department if it does not have the necessary information. As in this case, difficulties can arise if a taxpayer cannot reach the CRA or the CRA cannot reach the taxpayer for additional documents. When Célestine contacted us, we were able to get her in contact with someone at the CRA who requested and reviewed the necessary documents. In some situations cooperation is key.

It is clear that the CRA has a duty to collect debts that it has determined are owed to the government. Therefore, if a taxpayer disagrees with the amount owing, they should actively pursue a resolution before the CRA starts collection actions.

The CRA must maintain a delicate balance between collecting amounts owing and providing taxpayers with the service they expect. The CRA indicates on its web page that it understands that people and businesses sometimes find themselves in circumstances where they are unable to pay their taxes or other debts in full and on time. Therefore, the CRA advises taxpayers in these situations to call them so that it can help them figure out what to do.

We know that collections activities can put a strain on taxpayers, but it is also crucial for the CRA to carry out these activities so that the federal, provincial, and territorial governments can continue to provide the services we rely on, such as housing, hospitals, schools and roads.

CRA delays in processing income tax and benefit returns is something we always hear about. Generally, taxpayers tell us that the CRA is taking too long to process their return. These delays can be concerning for the majority of taxpayers, because they are eagerly awaiting a notice of assessment or their benefit and credit payments. The majority of taxpayers are also awaiting a refund; for example, for the 2023 tax-filing season, the CRA processed more than 18 million refunds, with an average refund of $2,262.

The CRA’s goal for returns that were filed electronically and on time is to process them, issue the notice of assessment and send the refund within two weeks, 95% of the time. This timeline does not apply to returns filed late or for deceased, bankrupt, international or non-resident individuals or emigrants. Also, it does not apply when returns are filed for multiple tax years or if the CRA has to contact an individual for more information.

We regularly heard from taxpayers who said that the CRA had not met its service standard, but they did not know there were so many exceptions. One taxpayer said that they had lost their opportunity to buy a house because they had needed their notice of assessment to show their tax status to their mortgage lender, but the CRA had not sent it in time.

We also heard from other taxpayers who had filed on time but had not received their notice of assessment, and they suspected that the delay resulted from opening a first home savings account (FHSA) in 2023. Opening a FHSA should not create delays; however, the CRA confirmed that there had been an issue one month into the tax-filing season. The CRA said that it immediately identified the issue and worked diligently to resolve it as soon as possible. The taxpayers felt that the CRA had not acted quickly enough and that they did not know why it took the CRA so long to communicate this.

The CRA delays in processing returns can impact taxpayers in many different ways. Delays can also restrict which benefits they can apply for through the CRA.

Late-filed returns can lead to increased delays because the CRA does not have the same amount of resources year-round. It reduces some of its review program workforce between October and February, which can cause slower processing times. It also does not have a public commitment to taxpayers on how long it will take to process late-filed returns.

The CRA could reduce the number of complaints by setting clear expectations. It needs to make taxpayers more aware that a late-filed return may not be processed as quickly as one that is filed on time. It also needs to make taxpayers more aware that if their return is selected for review, it could take much longer to be processed.

We have always received complaints related to the CRA’s administration of the Canada child benefit (CCB). The CCB is a crucial benefit that over 3.7 million families rely on. On average, each family received over $6,000 in the 2022–2023 benefit year (July 2022 to June 2023). When these benefits stop the impact can be extreme, as some rely on them to meet their families’ basic needs, while others use the payments to provide and afford their children’s extracurricular activities.

In particular, we have heard that a change in care for a child can create issues with the CCB.

Both the CRA and taxpayers can make mistakes. However, it is important for the CRA to have efficient mechanisms in place to make correcting errors as quick and easy as possible.

However, as shown in the example below, there are times when no one has made a mistake but the CRA’s procedures and processes can affect CCB payments.

Our Office is only able to carry out its work because people are willing to bring important issues to our attention. However, we also know that some taxpayers are concerned that complaining could impact them negatively and choose not to complain.

Under the Taxpayer Bill of Rights, taxpayers have the right to lodge a service complaint and request a formal review without fear of reprisal, but we know that concerns still exist. We are also aware that not everyone is familiar with how the government works, what information departments have access to, and what information they share. This can be the case for newcomers to Canada.

When Sasha, a newcomer to Canada, contacted our Office, we were able to do more than simply resolve her individual complaint. Our review of her complaint allowed us to identify issues that could affect many temporary residents. As a result of Sasha’s case, the Taxpayers’ Ombudsperson opened a systemic examination to see if there were opportunities for the CRA to make its processes fairer.

The CRA’s contact centres are always at the top of our list of reasons why taxpayers submit complaints to our Office. This comes as no surprise as this year CRA general enquiries contact centres received more than 24.8 million calls. For many Canadians, there is no other option because the CRA has limited in-person service and they cannot or do not want to use the CRA’s self-serve options available through its online portals.

With such a high number of calls, it would be unrealistic to think that every interaction will meet a taxpayer’s expectations. This year was no different. People complained to our Office about a variety of topics related to the contact centres, such as:

• wait times
• getting disconnected
• inconsistent information
• CRA agents refusing supervisor access
• hours of service

Over the years, we have heard from taxpayers about the difficulties experienced by those living in Western Canada trying to access CRA services. We have heard that once the phone lines open for their time zone the queue may already be long, increasing their wait time, while others have said that they were unable to resolve their issue before the hours of service ended.

We looked at the service the CRA offers through the lens of a taxpayer who lives outside the Eastern time zone, as we found that the CRA often used Eastern time as a benchmark to establish service.

When examining the hours of service offered by the CRA through its main contact centres, we determined they were reasonable for most, as they were open Monday to Friday from 8:00 a.m. to 8:00 p.m. and Saturday from 9:00 a.m. to 5:00 p.m., local time. However, we found that a caller’s telephone number might prevent them from accessing these hours of service.

This can impact on taxpayers who move, who live in the North, but keep their southern telephone number. In addition, taxpayers who do not reside in the Eastern time zone do not have the same time-of-day access to live CRA agents for general enquiries.

When a northern resident has a telephone number without an 867 area code, they are particularly impacted if they try to contact the CRA. This is because the CRA has dedicated phone lines so northern residents can speak to an agent equipped to answer questions about tax affairs specific to northern residents. However, callers cannot reach these lines if they do not have a phone number with an 867 area code.

Following our request, in the spring of 2024, the CRA extended its enquiries contact centre hours and no longer restricts callers based on their telephone number. Taxpayers are now able to contact the CRA regardless of their telephone number, as long as an agent is available. The enquiries extended hours are now, in Eastern time, Monday to Friday from 6:30 a.m. to 11:00 p.m., Saturdays from 7:30 a.m. to 8:00 p.m., and closed on Sundays.

In addition, the CRA added a disclaimer to its web page, Contact the Canada Revenue Agency (CRA) informing northern residents its dedicated phone line is available only to residents of Yukon, Northwest Territories and Nunavut calling from an 867 area code. The CRA also explains that taxpayers calling from a different area code need to call the general enquiries line.

While we are pleased the CRA partially implemented our request, it has more work to do. For example, it could communicate to northern residents who call the dedicated line the same information that it provides at Contact the Canada Revenue Agency (CRA). While the CRA updated the messaging to inform callers without an 867 area code why their call was blocked, they did not inform callers where they can call to get service. When calling taxpayers are only provided with the following statement:

In addition, the CRA could also look at routing calls based on the caller’s location found in their CRA profile, not their area code. While this might not be feasible right now due to system limitations, the CRA should consider doing so once it onboards a new telephony system.

We found that the CRA did not provide the same level of service to all Canadians, specifically, Canadians who reside in the Western provinces and territories have a smaller service window than those in Eastern Canada.

For many government departments and private companies, service hours can vary depending on the type of service people are seeking. For the CRA, it provides different service hours for different areas such as for savings and registered plan administrators and collections. This sometimes means that those who reside in the Western provinces and territories cannot call the CRA as late as those who live in the Eastern provinces and territories.

For example, if Suzy Saffire lives in Prince Rupert, British Columbia, and has a tax debt but cannot pay it, she may want to talk to the collections officer in charge of her file. If Suzy cannot reach the officer, her only option is to call the Collections Contact Centre, which is open Monday to Friday from 7 a.m. to 8 p.m., Eastern time. While these are reasonable hours for those who live in Eastern Canada, the time zone change means that this is 4 a.m. to 5 p.m. in British Columbia. These hours make it very difficult for Suzy to deal with her debt, especially because she has small children, works until 5 p.m., Pacific Time, Monday to Friday and needs to take them to school each morning.

The recommendations made by the Taxpayers’ Ombudsperson are not binding, but we influence change by communicating regularly with the CRA about any systemic issues we identify. We raise many issues we find throughout the year with the CRA. The CRA then takes corrective action without us needing to make a recommendation. We have found this approach to be effective, and in the past year we have seen many improvements.

Over the years, many taxpayers have told us that creating an online account with the CRA is a long-drawn-out process. To get full access, taxpayers were forced to wait to receive a security code in the mail. There had to be a better way.

In our 2021–2022 Annual Report, we recommended to the Minister of National Revenue that the CRA look for ways to provide in-person, same-day identity verification of a taxpayer and provide full access to their CRA account in a timely manner.

We are pleased to see that in March 2024, the CRA made it easier for taxpayers to access its digital services. The CRA’s new identity validation option allows taxpayers to have their identity validated quickly and to receive immediate full access to their online CRA account. This demonstrates the CRA’s willingness to make its services more accessible.

In our 2022–2023 Annual Report, we applauded the CRA’s proactive approach to support Canadians in Atlantic Canada and Quebec who were affected by Hurricane Fiona in September 2022. The CRA recommended to the Minister that it extend reporting deadlines to provide relief to affected Canadians. The Minister approved the recommendation, and the filing and payment deadlines were extended to October 31. We also encouraged the CRA to continue to use this proactive approach when appropriate.

In February 2023, we were pleased to hear that the CRA was going to develop a disaster relief playbook. We knew that creating a playbook would provide the CRA with a more structured approach to help Canadians in difficult situations. It would also help to make sure that taxpayers are treated fairly when affected by disaster.

The CRA tested a prototype this fiscal year, and it became a crucial CRA-wide resource to respond to disasters. Once the CRA tested and refined the prototype, it launched the playbook in April 2024.

These kinds of initiatives demonstrate the CRA’s commitment to its People First approach. Further, they not only help Canadians but also lessen the administrative burden that disasters cause for the CRA’s taxpayer relief program.

Our Office is committed to providing taxpayers with the best possible service, and we know that they expect us to contact them quickly. Unfortunately, this past fiscal year, we were not able to meet our goal of contacting taxpayers within five business days after receiving their complaint, 95% of the time. Despite some of our officers working overtime to try and meet our goal, we only met this timeframe around 30% of the time.

We know it is important to be transparent and to set realistic expectations; therefore, when it became clear that we would not reach our goal, we added a banner to our website to tell taxpayers about the delays and when they could expect to hear from us. That said, to help us improve our results going forward, we increased the number of intake officers at our Office.

Our limited resources have prevented our Office from achieving our own service standards, causing delays for taxpayers. Although we have a small team, our employees responded to over 4,500 enquiries and actioned over 2,800 complaints.

Other factors also affected our timeliness. For example, because we do not have direct access to protected taxpayer information held in CRA databases, we rely on the CRA to provide us with the information, with the taxpayer’s consent. As a result, we must request information from the CRA to process our complaints. We would not be able to serve taxpayers without a good working relationship with the CRA. This positive relationship resulted in the CRA responding to over 85% of our approximately 2,600 requests on time.

A continued focus on serving vulnerable, hard-to-reach non-filers

The CRA administers over a hundred different programs. It also quickly introduced emergency benefits, which were a lifeline for many people during the COVID-19 pandemic.

It is important for individuals to file an income tax and benefit return every year, even if they have no income to report or their income is tax exempt, because filing can open the door to benefit payments and tax credits. These include the goods and services tax/harmonized sales tax (GST/HST) credit, the Canada child benefit (CCB), and the Canada Carbon Rebate (CCR), to name a few.

Tax filing is also a requirement for programs that other federal departments administer, such as the Guaranteed Income Supplement and the new Canadian Dental Care Plan. In addition, eligibility for some provincial, territorial and municipal benefits can be linked to tax filing, because the applicant may need to provide their CRA notice of assessment to verify their income. The importance of tax filing cannot be overstated.

Vulnerable populations are a collection of diverse individuals who are disadvantaged or marginalized in some way. This could be due to socio-economic factors, living situations or difficulties accessing government services. Vulnerable and hard-to-reach populations can include:

• housing-insecure individuals
• Indigenous Peoples
• modest-income individuals
• newcomers, including refugees
• persons with disabilities
• seniors
• youth

The CRA and our Office continue to focus on vulnerable populations who do not file a return, and how to reach them to make them aware of the advantages of tax filing. While there are limited estimates available, some academics have estimated that close to $2 billion in benefits are unclaimed.

The economic and social well-being of people in Canada is supported by the delivery of benefits and tax credits. The CRA has said that its overarching goal is to ensure that individuals are aware of and receive the benefits and credits they are entitled to, and it undertakes significant efforts to reach people, in particular vulnerable populations, to increase benefit uptake.

In last year’s 2022–2023 Annual Report, we wrote about the challenge of identifying how many non-filers there are in Canada and who they are. The CRA outlined the existing challenges of identifying all non-filers, since tax filing is the primary source for identifying and assessing an individual’s eligibility for benefits. Available data on non-filers is generally limited to:

• individuals who have not filed a return but there is employment or other information slip data available
• individuals who filed a return in the past but have since stopped filing.

As a result, one of the OAG’s recommendations was that the CRA, ESDC and Statistics Canada should establish a joint prioritization, planning, monitoring, and reporting processes to improve how they measure the take up of benefits. The OAG said this process should not only use and improve upon existing data but also define and implement process actionsFootnote 4  to collect additional data on specific hard to reach populations.

It is important to note that the CRA’s collaboration with Statistics Canada and ESDC must comply with the legislative provisions for the sharing of taxpayer information under section 241 of the Income Tax Act. As well, Statistics Canada and ESDC must ensure that they have the authority to share the relevant information that they are collecting and disclosing to the CRA.

The CRA, ESDC and Statistics Canada all agreed with the recommendation, developed an action plan, and presented a final joint report on this particular recommendation to the Standing Committee on Public Accounts on April 30, 2024.

The joint report looks promising. The CRA developed a revised methodology to calculate a more accurate number of non-filers who therefore did not have access to the benefits they may be entitled to. The CRA, ESDC and Statistics Canada also reported that they have undertaken several reviews and research projects to better understand the sociodemographic and geographic characteristics, and the gaps in benefit take-up, for hard-to-reach populations. This includes linking their administrative data to census data.

Additionally, the CRA, in collaboration with Statistics Canada, is looking into the potential of simplifying the tax-filing process for individuals receiving social assistance. This research is underway and will compare social assistance program data collected by the province of Ontario to CRA’s tax data. Based on the outcome, the CRA could consider using provincial and territorial data to simplify tax filing for this particular population.

Our Office is looking into international tax jurisdictions’ administration of taxation and benefits to learn more about if and how they approach the issue of reaching vulnerable non-filers who may be missing out on benefits and credits.

We are researching whether other tax jurisdictions similar to the CRA administer both taxes and benefits; if tax filing is a requirement to receive benefits and credits; how tax filing is done in their country, such as whether taxpayers need to file or if it is automated; and what programs they may have in place to assist vulnerable, hard-to-reach individuals.

Through a better understanding of what is being done in other countries, identifying commonalities and looking at the best practices, we hope to develop ideas on how our Office can help with the non-filer issue in Canada. Our research is still in progress, and we plan to speak about it more in the 2024–2025 fiscal year.

Throughout 2023–2024, we actively engaged with thousands of individuals, organizations, and professionals across Canada to raise awareness of the services we offer and to listen to any service issues these groups face when interacting with the CRA. These interactions provided valuable insights into the challenges faced by taxpayers, in particular vulnerable and hard-to-reach populations.

During our outreach efforts, our primary objective was to connect with anyone who could benefit from our services and gather feedback on their experiences with CRA services. This feedback is crucial in shaping the work we do; it helps us identify potential systemic issues and drives improvements in CRA services.

The majority of these engagements were conducted in person, allowing us to meet with people from coast to coast to coast.

This year, one of our main focuses was reaching out to northern communities. These communities often encounter unique challenges due to their remote locations and limited access to reliable Internet services. Feedback from these areas highlighted persistent issues including difficulties in accessing CRA services, such as long wait times and frequent call drops.

Additionally, individuals reported facing frequent reviews of their income tax and benefit returns, particularly concerning northern residents deductions. We heard that these reviews occurred almost annually despite no changes in the individuals’ addresses or income.

Language barriers and a lack of local tax-filing assistance further compounded the challenges faced by northern residents.

For the past few years, our Office has received periodic updates from the CRA on the various initiatives it has in place or that are in development to assist vulnerable populations, particularly non-filers.

Under the Community Volunteer Income Tax Program (CVITP) and the Income Tax Assistance – Volunteer Program (ITAVP) in Quebec, thousands of volunteers from community organizations across Canada help eligible people by completing and filing their income tax and benefit returns for free. From January 1 to December 31, 2023, CVITP volunteers prepared 869,660 federal income tax and benefit returns, and ITAVP volunteers prepared 195,980 federal returns in Quebec.

To be eligible for the CVITP, individuals must have a modest income and a simple tax situation, which generally means their information slips are already on file with the CRA.

According to the CRA’s web page, About free tax clinics, volunteers should not complete returns for individuals with complex tax situations, such as reporting:

• self-employment income or employment expenses, with some exceptions
• businesses income and expenses
• rental income and expenses
• interest income over $1,000
• capital gains or losses
• bankruptcy in the tax year (or the year before, if that return has not yet been filed)
• deceased person
• foreign property (T1135)
• foreign income with some exceptions

During our Office’s engagement with the non-profit sector in 2023–2024, we heard about the continued challenges faced by individuals with modest incomes who work in the gig economy as food delivery or rideshare drivers, as well as in other digital platform sectors. We also understand from media reports that these workers are often newcomers to Canada.

Income earned from the gig economy is considered to be self-employment income. This means that when a worker earns a modest income, with their sole source of income being from the gig economy, they still do not qualify to have their tax returns prepared for free under the CVITP, even though their income level would otherwise make them eligible for the program. In our 2020 systemic report, Reaching Out: Improving the Canada Revenue Agency’s Community Volunteer Income Tax Program, we noted that individuals who are self-employed, especially those working multiple part-time jobs, may be among those most in need of the CVITP.

In the United States, under the Internal Revenue Service’s Volunteer Income Tax Assistance (VITA) program, which is similar to the CVITP, some organizations complete tax returns for individuals reporting limited self‑employment income.

Expanding the CVITP eligibility criteria in a similar way, to include returns with basic self-employment income, with limited expenses or losses, could assist gig workers with low to modest income get the benefits and credits available to them.

In January 2021, the previous Minister announced that the CRA would invest more than $10 million over three years through the CVITP Grant. The CVITP grant began as a three-year pilot program to help organizations with the expenses associated with hosting free tax clinics. The program provides funding to the organizations based on the number of federal income tax and benefit returns filed. The CRA also works closely with Revenu Québec, which provides a separate grant for Quebec organizations, to offset the cost of completing the provincial tax return.

In January 2024, the CRA promoted the grant program on social media and hosted a webinar about the CVITP Grant to help organizations find out if they are eligible and how to apply. The CRA also created web pages with more information about the grant. However, we noted a discrepancy between several web pages about the grant application period: some pages said host organizations should apply between May 1 and June 30, 2024, but we also found a page that said the application period was between May 25 and July 31, 2024.

Given that the CVITP Grant is distributed on a “first come, first served” basis, it is important for host organizations to be aware of the correct application period. We referred our observations about the CVITP Grant web pages to the CRA for review, and it took quick action to update the applicable pages.

Our Office has consistently heard positive feedback from volunteers about the CVITP and the CRA’s regional coordinators who help them. However, there is always room for improvement. In last year’s annual report, we recommended that the CRA simplify the administrative process for tax clinics, continue offering the CVITP Grant, and consider making long-term investments in the program for the benefit of Canadians. The CRA agreed with our recommendation.

Being able to rely on the grant from year to year would help organizations and could help grow the CVITP even more. The CRA informed us that in 2023, the third year of the CVITP Grant, the number of organizations approved for the grant had almost doubled since 2021. There was also an increase in the number of organizations serving Indigenous communities or operating in northern, rural or remote communities who receive an additional subsidy to support their specific needs.

Last year we mentioned that in 2022, while visiting a couple of free tax clinics in Quebec, we heard from the host organizations that, in their view, the process to apply and receive the provincial Revenu Québec grant was simpler and less administrative than that of the federal CVITP Grant. As we did not have time to validate what we heard before we published last year’s annual report, we did some additional research this year.

We did not identify any significant differences in the respective administrative processes, but noted that Revenu Québec had introduced its provincial grant in 2018, while the CRA’s CVITP Grant pilot only began in 2021. It is reasonable to expect that the CVITP grant processes may have initially been more administrative, as the pilot was in its early stages. Our understanding is that the CRA continues to adapt, evolve and improve the grant program, in keeping with the purpose of a pilot project.

In terms of administrative processes, we also learned that starting in the 2024 tax-filing season, Revenu Québec aligned its grant application period with that of the CRA to simplify the administrative task for host organizations in Quebec. Also starting in 2022, the CRA no longer required organizations to submit expenses when applying, but they still need to keep an account of their expenses in case the CRA asks to see them.

With the CRA’s changes to the CVITP Grant funding model in 2023, the CVITP grant also pays out more, particularly to organizations who serve Indigenous communities or that operate in northern, rural or remote communities.

For the 2023–24 fiscal year the CRA participated in 119 Super Clinics that were open for 153 days. The CRA works with stakeholders and partners, including federal, provincial, territorial, and municipal departments, and leverages community support organizations, to host collaborative Super Clinics. In addition to hosting a free tax clinic, they offer visitors a single point of contact for assistance with important government services. For example, officers are able to help individuals with CRA services such as updating an address or requesting a printout of a notice of assessment and assist with matters involving the Canada child benefit (CCB), disability tax credit (DTC), and other benefits and credits. Individuals can also speak with Service Canada officials to obtain or replace a social insurance number (SIN) or to get help with employment insurance (EI), the Canada Pension Plan (CPP) or old age security (OAS) issues. As well, other providers offer many other services.

The Super Clinics demonstrate how a cross-departmental shared service delivery model can make things easier and more convenient for the public. We encourage the CRA to continue working with Service Canada to offer Super Clinics from more locations, so that more people have easy access to the support offered by Super Clinics, as well as increase the number of people helped each year.

The CRA should continue its collaboration with other levels of governments and community partners to enhance Super Clinics.

The CRA’s outreach officers help organizations that provide services to vulnerable segments of the population, such as non profits, shelters, retirement homes, friendship centres, immigration associations and schools. The officers perform a number of activities such as giving training sessions and presentations, hosting a booth at an event, and providing information on how to get benefits and credits.

The CRA has an online request form that organizations can use to request outreach services and products such as factsheets and posters. The CRA also makes these materials available online to print and share, and they can be filtered based on the target audience. These materials include those specific to different vulnerable populations as well as some with general information on topics such as child-related benefits and credits.

Clearly, the CRA has developed and made available many resources to assist organizations, including those that serve vulnerable segments of the population. However, the resources are only helpful if the organizations are aware of them.

During our Office’s visits with organizations across Canada in 2023–2024, we heard very positive feedback from some of them about the outreach services and support they received from the CRA, including from in person visits. However, we also heard from some organizations and individuals that they are unaware of the services and materials the CRA offers. Additionally, we heard that the materials could provide more detailed information. We heard this on more than one occasion across Canada.

To address this issue, the CRA could:

Understandably, the CRA’s in-person outreach activities shifted to a virtual format for the first two years of the COVID-19 pandemic. In the 2022–2023 fiscal year, the CRA began to do more in-person activities, but the majority of its outreach was still being done virtually. In 2023–2024, the CRA overall did slightly more outreach than in 2019–2020, but the number of in-person outreach activities had not returned to pre-pandemic levels.

During the first two years of the pandemic, it was essential to pivot to virtual engagement. However, as the world has returned to some sense of normalcy, our Office has seen firsthand how visits, particularly to remote Indigenous communities, are appreciated.

The CRA informed us that for 2023–2024, its outreach plans aimed to address vulnerable and underserved communities through new activities and partnerships. New data and enhanced business intelligence tools, along with local knowledge and program experience, helped the CRA tailor its outreach plans on a regional basis. Moving forward, the CRA is continuing to expand its outreach activities, including in northern and Indigenous communities.

We encourage the CRA to visit, in person, as many of these communities as feasible, including those it has not visited in the past. Our Office’s experience of doing outreach to smaller remote communities, including to the same communities more than once, has been very positive. Our employees were recognized and warmly welcomed upon their return visit, which is an important part of building trust.

Budget 2023 announced that the federal government would almost triple the number of eligible Canadians for the CRA’s File my Return service by 2025. It also announced that the CRA would pilot a new automatic filing service to help vulnerable non-filers receive the benefits they are entitled to.

File my Return has since been rebranded as SimpleFile by Phone. This service allows selected individuals with lower or fixed incomes and a simple tax situation to file their income tax and benefit returns over the phone. On March 4, 2024, the Minister announced that the CRA was expanding the SimpleFile by Phone service to double what it was in 2023. As a result, more than 1.5 million individuals were invited to file their returns over the phone.

The service uses the individual’s information that the CRA has on file. Through an automated process, it asks them to verify some personal information and answer a series of short questions using the keypad on their phone. The CRA uses the responses to automatically complete and file their return.

In summer 2024, the CRA will pilot automatic filing services (phone, digital, and paper) targeting lower-income individuals who have never filed an income tax and benefit return or who have a gap in their filing history, and therefore are not receiving the benefit and credit payments they could be entitled to. However, our understanding is that the program is still on an invitation-only basis, potentially leaving many vulnerable non-filers behind.

Our Office is very interested in seeing the results of the SimpleFile by Phone service. Making tax filing easier is a key step towards increasing filing rates, particularly among our most vulnerable. However, the phone service still places the onus on the individual to contact the CRA, versus a more passivefiling model where a notice of assessment is automatically issued toindividuals with a simple tax situation, based on the information on file with the tax administration.

Moving forward, the CRA is planning to consult with stakeholders, community organizations and tax professionals on the next phase of the CRA’s automatic tax-filing plan for 2025 and beyond. In due course, as the filing initiative and consultations progress, we plan to meet with senior CRA officials to learn more.

The Disability Advisory Committee (DAC) advises the Minister and the CRA on how to improve the way tax measures are administered and interpreted for individuals with disabilities. In March 2024, the DAC released its fourth annual report. The report provided an update on actions taken by the CRA based on past DAC recommendations, including:

• launching a fully digital DTC application process that makes it faster and easier for applicants and their medical practitioners to complete the application form;
• monitoring and enhancing the DTC client experience survey; and
• improving the readability and accessibility of correspondence to DTC applicants.

The DAC’s annual report includes 26 new recommendations to the CRA. We read with particular interest the DAC’s comments and recommendations about the importance of data collection. We completely agree on how important it is to leverage data. As mentioned, we made a recommendation in our 2022–2023 Annual Report that the CRA find new ways to estimate and identify non-filers in Canada and their demographic make-up to better educate and inform vulnerable populations who may be entitled to benefits but who are not receiving them.

The DAC emphasized the importance of collecting data to increase access and reduce barriers to the DTC, particularly for Indigenous Peoples, Black Canadians and other racialized groups, as the DAC reported that these groups are more likely to experience barriers to accessing disability services and supports they are entitled to.

Linking sociodemographic and income tax filing data could lead to better identification of populations facing difficulty in applying to the DTC and result in a deeper understanding of the needs of the disability community in Canada and the barriers they face, as well as an increased DTC uptake among those who need it most. The CRA will be doing an in-depth review of the DAC’s latest recommendations to determine its action plan.

In conclusion, it is clear that the CRA has focused many of its efforts and resources over the years on making vulnerable, hard-to-reach non-filers more aware of the advantages of tax filing. Despite the gains realized from these efforts, many non-filers are still potentially missing out on benefits and credits.

We are encouraged by the focus on cross-departmental data collection and analysis. Having a more complete demographic picture, as we recommended last year, can help identify groups of non-filers. This, in turn, can inform CRA strategies to identify and assist vulnerable populations with filing their returns to get the benefits and credits they may be entitled to.

For example, the CRA informed us that for the Indigenous population, it collaborates with external partners such as national indigenous organizations, the Department of Finance Canada, Indigenous Services Canada, and ESDC.

Taking such an approach means that internal and external partners can use the data to identify where there are lower tax-filing rates to focus outreach activities, improve tax filing, and increase benefit uptake rates for the Indigenous population. We look forward to seeing the results of this work and how the results will be measured.

Our Office will continue to examine the important issue of vulnerable, hard-to-reach non-filers over the next fiscal year.

These efforts are yielding quantifiable results. For example, in 2023–2024, we carried out an advertising campaign targeting taxpayers living in the territories. As a result, compared to the previous fiscal year, our Office saw average increases of visits to our website of:

• 279% from Yukon
• 126% from the Northwest Territories
• 59% from Nunavut

Our website also saw a significant increase in visits overall. We experienced a total increase of more than 40% for both our French and English content, but most impressive was the increase in traffic to our Submit a complaint web page. Although this is our second-most visited page after our home page, it is the most clicked on page. Compared to the previous fiscal year, internal clicks^{Footnote 5}  to this page increased by more than 900% for both the French and English pages.

These numbers demonstrate success not only for the OTO but also for taxpayers. As the public’s awareness of our Office increases, so does their understanding of their rights when dealing with the CRA.

The increased workload is due to many factors, which include but are not limited to:

• communications activities such as advertising, outreach,and media presence
• tax season
• trends in CRA-related service issues
• CRA collection activities
• increased awareness of our Office and the services we offer

Our staff are feeling the impact. We have seen an increase in workload comparable to the peak of the pandemic, in fiscal year 2021–2022, which was the busiest year in our Office’s history. As mentioned, we are experiencing pressure in managing this demand, which has caused a backlog of cases. In turn, the backlog has caused an increase in the amount of time we take before communicating with taxpayers and closing cases.

The work of an intake officer involves answering incoming calls on the general enquiries line, listening to the caller’s questions or concerns, taking notes, logging the call in the case management system, and then taking the appropriate action to process the file according to OTO procedures. While they are not on the phone, intake officers process online complaints and incoming mail. These are also logged in the case management system. It is very demanding work, where empathy and active listening are required.

The intake officers also listen to voicemails, return missed calls, contact taxpayers after we received their complaint, and request more information from taxpayers so that they can properly process their complaint. If officers receive a complaint they identify as urgent, it takes priority over their regular workload. This means that if too many urgent requests come in, it is hard for officers to catch up on non-urgent complaints, which increases the backlog and adds pressure on staff.

The increased complexity of calls has also increased the amount of time agents spend on the phone.

In March 2024, we received 1,639 calls^{Footnote 6} . This is the highest level we have seen in our Office’s history. This chart also shows a peak period during March to July where call volume is consistently higher over the years. This is due to the tax season and the beginning of the new benefit period. Even with decreased volume outside this peak period, our Office is still not able to catch up on the backlog with our current resources.

These are the performance indicators that we report to the Treasury Board of Canada Secretariat. The last two indicators are our commitment to taxpayers on the timeline of service they can expect from our Office. Currently, less than one third receive initial contact from us within five business days of receiving their complaint. This can frustrate complainants since they are not receiving a timely response, unless they are in a compelling situation. This frustration from complainants also leads to increased calls, as they are unsure of the status of their file at our Office, which adds to the time we have to spend on each case.

We log each enquiry we receive; however, we only create new enquiry cases for individuals who do not have an existing complaint. For example, if a complainant calls multiple times about the same issue(s), we only consider the first call as being one enquiry, the additional calls are added to the existing related enquiry or open case.

This past year we saw over a 66% increase in enquiries compared to 2022–2023.

Complaints are received online, by mail, fax, or phone. Once we receive a complaint we will review it to see which step it is at in the CRA’s Service Feedback process, or if there is a compelling situation.

This past year we saw close to a 29% increase in complaints compared to 2022–2023.

If we identify an urgent compelling situation in a complaint, we make an urgent request to the CRA by facilitating contact between the complainant and the CRA.

This past year we saw over a 54% increase in complaints compared to 2022–2023.

* Please note that amounts may not balance due to rounding.

** Represent internal services expenditures that relate to the support of the Office of the Taxpayers’ Ombudsperson (OTO). As of April 1, 2019 internal services expenditures that relate to the support of specific programs are being reported under the applicable core responsibility in compliance with the Treasury Board of Canada Secretariat’s Guide on Recording and Reporting of Internal Services Expenditures.

*** The amount shown under related party transaction represents funding that has been transferred by the OTO to the Canada Revenue Agency (CRA) for corporate services rendered by the CRAin the area of financial management advisory services.

Recommendations in this annual report are made to the Minister of National Revenue and the Chair of the Board of Management.

We are available 8:15 a.m. to 4:30 p.m., Eastern time, Monday to Friday (except public holidays).

Telephone 

Within Canada and the United States, call 1-866-586-3839
Outside Canada and the United States, call collect 613-221-3109

Fax 

Within Canada and the United States, fax 1-866-586-3855
Outside Canada and the United States, fax 418-566-0321

Address

Office of the Taxpayers’ Ombudsperson

Suite 1000
171 Slater Street
Ottawa, ON K1P 5H7
CANADA

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